IBM is the Result of a Merger of Three Companies

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Updated: Mar 31, 2023
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IBM started in 1911 and is the result of a merger of three companies. These three companies are Tabulating Machine Company, the International Time Recording Company, and the Computing Scale Company. At IBM, they strive to be the leaders in the creation, development, and manufacturing of information technology within the industry. These information technologies include computer systems, software, networking systems, storage devices, and microelectronics. The current CEO is Ginni Rometty, and she is also the first woman to be the head of the company.

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In the past, IBM used to make computers, but as time slowly progressed, they no longer became the leader in manufacturing computer towers. In recent years IBM has changed its business model. The new business now gives internet (cloud) based solutions to other businesses in a variety of ways. They also offer technology to companies that can outsource their own IT departments, as well as offering storage housing for major companies. In short, IBM offers mostly services for many IT companies as well as giving companies the option to use IBM as a data storage solution. IBM as of recent has invested in and created an AI supercomputer called “Watson,” which was named after IBM’s founder, Thomas J. Watson. This supercomputer combines AI and sophisticated analytical software to answer questions, and IBM sees Watson as the future of Information Technology.

Needs assessment

To perform a Needs Assessment, we must first identify the business needs of IBM. IBM has always been a behemoth within the IT industry. IBM is broken up into two categories, the hardware and service sides. On the side of the hardware, IBM in the past has been good at delivering a strong mainframe system, powerful servers, and storage, and they continue to stay faithful to their products as well as being consistent over their competitors, their needs on the hardware are to stay relevant and prevalent by keeping the products more powerful and faster than other competitors if they wish to continue to sell their hardware.

In comparison to the towers that they used to sell in the past, the towers were far too expensive in comparison to their competitors, and the system requirements on their computer towers were not enough to justify the price as well. Price is another factor for the company in terms of hardware because the company must validate the price of its product. In terms of service, IBM has been offering consultation services at all levels of IT. IBM has been attempting to become a cloud service IT company. However, their revenue growth has slowly been in decline for the past recent years. Google and Amazon both offer the same service (cloud-based solutions) as IBM does.

The difference between IBM and its competitors is that Google and Amazon have wider notoriety than IBM does and are now the trending companies that offer superior services in almost every department; in addition, the competitors of IBM also have better infrastructure and technology within their own companies to provide better services as well. The first example is email, a big part of and time spent in a company. IBM currently still uses Lotus Notes for their email. Lotus Notes is an application suite unlike Microsoft Office that presents functionalities such as email, calendaring and scheduling, address book, database, web server, and programming into a single front-end.

Lotus Notes has things it does well. However, there are many glaring problems, such as not being able to copy and paste words from a web browser into an email you are writing without issues. Lotus Notes has its own HTML rendering engine that prevents you from displaying anything the way people want as well. This means that if an employee wants to open a link from a mailing list from IBM, they cannot open the link in Lotus Notes built in the web browser because there would be errors. Searching Emails also takes a long time to generate your results. With these examples, it’s clear that IBM must adapt to a new email application, the most popular suite being Microsoft Office/Exchange.

Microsoft Exchange has a couple of interesting features and is much faster in comparison to Lotus Notes. Some features include the capability to allow users to synchronize desktop applications with their mobile phones or laptops. Exchange also allows communication from one organization to another. Users can share calendars and messages in and out of the organization, and voicemail can even be integrated into Outlook Web Access. Similarly, the web application can also use an overhaul or modifications because it is rather slow and unoptimized.

IBM Another problem is the usage of SOCKS. SOCKS is a protocol used as a proxy for network communication between clients and one that has not been further developed. SOCKS has been widely used years ago but has been slowly abandoned for other newer solutions. Proxy servers are basically servers that send requests and replies. They act as a mediator for clients looking for resources from other servers. In the case of SOCKS, they are a general-purpose proxy server that creates a Transmission Control Protocol (TCP) connection to other servers for a client and then sends all the traffic between the server and the client.

Gap Analysis

Describing the area: The area that will be focused on will be Networks and the Internet. IBM is currently in a tough position as a company because of a loss of identity. They understand that they are within the Information Technology industry and offer consultations and servers to businesses, but the company right now does not understand why businesses and consumers are choosing other companies such as Google and Amazon as hosts for their storage and servers as well as consultation.

As time progressed, IBM as a brand has slowly been disappearing as a company to the public. In addition, it can be said that IBM still uses many older methods of operations as well as has unique technologies within the corporation, such as still using Lotus Notes and SOCKS as proxy servers to establish a TCP connection to other servers. There are also certain web applications that can be modified and updated as well.

Determine Targets: Some targets that IBM can work on are providing Services and Software as a Service (SaaS), offering finished software and not only software you can write with, quality of their services and product, and finding ways to implement their new AI “Watson.” In conjunction, most targets can be alleviated by having efficient and faster technologies that the staff of IBM need.

Improvement steps: IBM has put importance on setting their services within cloud computing. However, they are trying to specialize in consultations and offering storage and servers mostly. One aspect that IBM can look upon is offering a SaaS with their cloud service. Currently, companies like Citrix and Microsoft offer SaaS with their Cloud services, and IBM can also offer software in comparison to their competitors. In addition, the SaaS would need to be something businesses would need in order to be appealing to them.

Another improvement would be offering software that has already been completed. Currently, IBM offers many tools and applications for businesses to create their own software. However, IBM does not offer many, if at all, any, software that businesses can readily use. IBM can create software applications for Accounting, Human Resources, E-commerce, and many other business-oriented software that can compete with other companies such as Oracle. Additionally, the next improvement can be the quality of their services and products.

In recent years, IBM has not kept up with the times and has been in decline as far as the quality of its servers and mainframes goes. With the focus of its business being on Cloud services, IBM has not been spending much of its budget on R&D in mainframes and servers. With the rise of cloud computing services, mainframes, and servers are not used as much as they were by companies, and IBM must decide eventually when and what they will be ultimately selling as a company.

Watson is the next biggest innovation that IBM has invested in. Watson is an AI that is a question-answering computer system that answers questions and also has the capability of learning new information. Because IBM has invested so much time and expenditure into Watson, IBM must take it upon themselves to properly market Watson and find the potential markets they can use Watson in. In view of the many difficulties IBM has, the company and staff must have the tools to properly assist and provide successful consultations and sales. Those tools having a better email system, a better and faster proxy or VPN, efficient and faster web applications, and finally, a more precise quality check in their product, are all needed to improve the company as a whole.

Implement and review

One of the first implementations IBM should have is replacing Lotus Notes with possibly Microsoft Exchange or just getting the entire Microsoft Suite. The standard edition of Microsoft Exchange is $699, while the enterprise edition cost is $3999. The standard edition has up to 5 storage groups and five databases per mailbox. The enterprise edition has up to 50 storage groups and 50 databases per mailbox. Lotus costs an estimated $100 per user for 1000 users, and the Lotus Domino server enterprise is $137 per 1000 users.

Just from looking at these numbers, Lotus seems to be much more expensive than the two email clients. Lotus does have many of its own perks, such as the feature to have the ability to put calendars together using outside programs such as Google calendars or Notes calendar. Lotus also has the social networking capabilities to add IBM notes such as blogs, bookmarks, forums, and meeting and community rooms as part of the connection. However, at the expense of being clunky, slow, full of errors, and crashes.

Microsoft Exchange may not have those same listed features as stated above. However, Microsoft Exchange, in conjunction with Microsoft Outlook, provides much faster results. An example would be setting up a new mailbox. With Lotus Notes, it can easily take 5 minutes just set up a new mailbox in comparison to Microsoft, which takes less than a minute. In addition to the hassle of setting things up in Lotus Notes, training a new employee to understand the ins and outs of Lotus Notes in comparison to, say, Microsoft or Google’s email system is much more time-consuming as well. The next implementation would possibly be looking into another PROXY, such as HTTP, which is similar to SOCKS. In the case of HTTP, it can understand and interpret traffic that goes between the client and downstream server (aka HTTP protocol). HTTP can also notice repeated requests and cache the replies to make improvements.

Currently, there are many ISPs that use HTTP proxies because they are simple and route all traffic on port 80 through the proxy server. Port 80 is the port that a computer sends and receives Web client-based communication and messages from a web server and is used to send and receive HTML pages and data. The reason for this implementation is that SOCKS servers are not as commonly used as HTTP is used today, as well as not supported as being an older solution. For a variety of reasons, such as authentication and security, having a supported and updated proxy, as well as having good speed, is important.

Another option could also be the use of a VPN (Virtual Private Network) with firewalls to allow users to securely and quickly access corporate applications and resources. The next implementation would be to make modifications to the IBM WebSphere Application server. IBM WebSphere Application Server performs the role of a web application server. To be precise, it is a software framework that hosts Java-based web applications. The problem with software was that it would take a copious amount of time to build and deploy an application. IBM has made updates to the application. However, there are many functionalities that are not properly working or is still not optimized. There is a decent amount of application server software; Oracle WebLogic, Apache Tomcat, and Microsoft IIS.


As technology changes, all companies must adapt to stay in business and industry, and IBM is no different. IBM still remains profitable. They still make quarterly earnings of 4.5 billion. However, in order to stay prevalent within the industry, the company must first understand its mission statement and standing as a company as a whole. IBM also could also use some consultation from a possible outside source, such as a third party that offers consultation for the company to help them realign themselves and understand their own objectives as a company.

IBM must also seize the opportunities that arise, such as cybersecurity which is a big industry that is growing. Although IBM still is managing to be profitable, it must make smart acquisitions to keep up with the times. Simply offering consultation services and selling hardware might not be enough to stay relevant. With the creation of Watson, they can use this AI within the company to make software to assist every department at IBM to answer questions and store information to enhance their own technological needs and possibly enhance their own services.

Another result is that many IBM employees agree that Lotus Note is obsolete and tedious to work with. Many IBM employees would rather use a different email program, such as Exchange, because of its ease of use and speed, in addition to its popularity and usage over Lotus Notes. The cost of Microsoft Outlook in comparison to Lotus Notes is also drastic in favor of Microsoft. Furthermore, previous employees and critics also emphasize that they wish IBM would make changes for the better when it comes to the quality of their service and product. For employees to sell a service to a business, they must provide a presentation on the interested product for the respected company. An example would be Bluemix which is a cloud platform that supports programming languages and services to help build, run, deploy, and manage applications on the cloud.

There have been incidents when employees would have to provide a demo and showcase the product, but incidentally, the platform would freeze or crash in the middle of the presentation in certain scenarios. From this example, we can learn that the R&D at IBM must create additional steps to ensure the quality of their product. The next feedback would be the WebSphere Application Server. Employees would agree that the software can be rather slow and can set up for a project can be rather time-consuming. The possibility of switching software or web application server can be inviting. However, the cost of transfer of data and transition can be expensive. Given these points, there are still reasons to attempt to optimize the web application server to cut back on idle time for the employees and headaches. All in all, not all the recommendations/ suggestions that have been listed need to be implemented.

That being the case, installing or thinking about any of the recommendations/ suggestions can be beneficial for the company because the issues that have been highlighted have been issues that were declared by previous or current employees as well as critics from outside IBM. It is important that IBM understands its mission within the industry as well as updating the technology within the company because competitors are always aggressive when it comes to Information Technology. Most of the products and services being sold to companies are employees who have to deal with the technology that has been developed in-house by IBM. Consequently, if IBM and management do not provide updated tools to their staff, they cannot properly sell their services effectively.


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  3. “IBM WebSphere Application Server.” Wikipedia, Wikimedia Foundation, 17 Sept. 2018,
  4. “Lotus Notes Vs. Microsoft Exchange: Guide to Compare Both Email Clients.” Script Report on Stale DNS Records with Powershell,
  5. “r/Networking – This Is Why Working for IBM Sucks.” Reddit, 2017,
  6. “What Is the Difference Between a SOCKS Proxy and an HTTP Proxy?”, 4 May 2012,
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IBM is the Result of a Merger of Three Companies. (2023, Mar 31). Retrieved from